2022 has arrived, and despite decades of menacing predictions by crypto enthusiasts, banks and the traditional banking system are here to stay.The only ending that happens – a new Ethereum 2.0 Roadmap Released by Vitalik Buterin late last year.
While the crypto industry is better off with this roadmap, 2021 has shown us that crypto is not disrupting or harming central banks in the same way that traditional banking did not kill crypto. why?
In all fairness, the battle between the two was equally brutal on both sides. Many cryptocurrency enthusiasts shouted about the impending catastrophe of the world financial system and described a bright future for cryptocurrency, where every item can be purchased with Bitcoin (bitcoin). Bankers, on the other hand, are scrambling to defend the traditional role of the banking system, blaming the technology’s low performance and lack of compliance.
Both predictions were wrong.
Fortunately, neither cryptocurrencies nor traditional banking have been disrupted, despite their hopes. On the one hand, no major crypto project is far from the tightest integration with banks.US-based cryptocurrency exchange Kraken gets banking license and Coinbase IPO Process It’s 100% a game according to banking/financial system rules. Most of the top projects use the services of only a few banks: Signature, SilverGate, Bank Frick – centralizing settlement and implementing banking principles using cryptocurrencies.
On the other hand, the banking world has created internal ecosystems for crypto projects.visa Introducing Crypto Consulting Services Help partners navigate the world of cryptocurrencies. Amazon Web Services (AWS) wants “Becoming the AWS of Crypto.” Switzerland proposal Banking services using cryptocurrencies. SolarisBank even provides APIs for crypto projects. The largest U.S. banks and exchanges are launching cryptocurrency-related services. in El Salvador, Bitcoin is recognized As a means of payment, this (in theory) means that IFOs need to be prepared for Bitcoin settlements with El Salvador.
What’s Stopping Crypto from Destroying Banks?
Humanity. Throughout human history, many new technologies have not been immune to control by state authorities, either directly or indirectly through corporations. Radio, television, the internet, social networks—everything that started with the idea of free dissemination of information ended up running counter to the fact of total control. The same story is happening with blockchain now and it is unlikely to change in the future.
In most cases, people try to exaggerate the risks and reduce the likelihood of a good outcome. In my opinion, this is what severely restricts and continues to restrict people’s acceptance of cryptocurrencies. But, as I said, this way of thinking is part of human nature.
Still, why does centralization beat decentralization? It took the world’s governments some time to understand that blockchain technology could not only be a problem, but a powerful tool for political gain. As a result, the blockchain, originally designed as a powerful free tool, has been completely reversed and turned into a tool for controlling money to a degree that was previously unimaginable. Like nuclear technology, humans use it for peaceful and military purposes; blockchain has both good and evil sides.
Not a loss though
At first glance, the cryptocurrency had to take a step back from its initial position of “hawkishness.” In exchange, it’s been widely recognized, distributed, and used by a considerable number of users around the world – which seems like a fair reward, a victory for those who predicted its imminent demise.
I believe the relevant significant growth RegTech Technology, Designed Expedite the compliance process and all possible checks leading to the acceptance of cryptocurrencies in traditional finance. These projects with implementing know-your-customer (KYC) / anti-money laundering (AML) solutions show a crypto response to banks: companies like Chainalysis, Onfido, and others can set up KYC operations more efficiently, while maintaining the full legality of the process.
Newly formed startups can’t go down the path of bank inefficiency and compliance, which is a breakthrough for almost any process. Nonetheless, in order to do business in the legal realm, they do their own compliance but are more efficient.
But will CBDC destroy cryptocurrencies? We should stop talking about the disruption of anything and instead think about future potential. Central Bank Digital Currencies (CBDCs) open issues, especially interoperability issues. Due to the incompatibility of CBDCs issued by different countries, their ability to convert to each other and the slowness of many processes related to government, we will not be able to talk about a quick solution.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Alex Axelrod is the founder and CEO of Aximetria and Pay Reverse. He is also a serial entrepreneur with over a decade of experience in leading technology roles. He used to be the big data director of the R&D center of JSFC AFK Systems. Prior to this role, Alex worked at Mobile TeleSystems, Russia’s largest telecommunications provider, where he was responsible for the development of anti-fraud and cybersecurity systems.